Summary

This report presents results from research work carried out for the Department for Environment, Food and Rural Affairs (DEFRA) on the financial performance of organic farms for 1999/00 and 2000/01 financial years. The aim of the report is to collate financial data for organic farms differentiated by farm type, in order to provide continuity between previous studies (project code: OF 0190) on the economics of organic farming covering years 1995/96 to 1998/99 and new research work carried out by the Institute of Rural Sciences, UWA, to obtain financial information for organic farms for the period 2001/02 to 2003/04 (project code: OF 0189). The financial data in this report were not collected directly, but were derived from other DEFRA-funded studies. Data are from farms of varied sizes within the samples for each farm type and not always of adequate sample size. This was particularly the case for horticulture while other datasets mainly comprised five farms or more per farm type. A cautious approach is required when viewing smaller farm samples as it is not possible to draw conclusions on the organic sector from these results; but may permit observation of data trends for the particular set of farms within the sample. Where possible, to provide an idea of economic trends over time, continuous farm data for 1998/99 and in some cases for 2001/02 are shown alongside the 1999/00 and 2000/01 data. The report highlights results for organic cropping, horticulture, dairy, lowland and LFA cattle and sheep farms and one set of results for in-conversion dairy farms. Comparable conventional farm datasets are shown alongside some organic datasets for comparison. This was the case for both organic and in-conversion dairy farms and LFA and lowland cattle and sheep farms for 2000/01 datasets only. From this report, the financial data show that most farm types under organic management had positive net farm incomes (NFI) with the exception of the in-conversion dairy farm sample. Management and investment incomes (MII) were positive values for all farm types with the exception of lowland and LFA cattle and sheep farms from the FBS sample. The financial trends varied by farm type between 1999/00 and 2000/01 with the organic cropping farm sample experiencing over 60% reduction in NFI, whilst organic dairy and LFA cattle and sheep farm incomes increased at varying levels over the two years. For all farm types where comparable data are shown alongside the organic farm sample, the organic sample showed higher NFI and MII values with the exception of the in-conversion dairy farm sample where income values were lower than the comparable dataset. Gross margin data are presented for organic dairy herds, LFA suckler cows and finished beef stock and LFA breeding ewe flocks. Arable gross margins are shown for winter wheat, spring wheat, oats, beans and potatoes crops and horticultural data are available for potatoes, carrots, beetroot and calabrese.